Boosted by more political money than expected, Meredith Wednesday reported that its broadcast group revenues rose to a record high of $183 million during the second quarter of fiscal 2017.
That figure, which includes $40 million in political, is up 31% over the same period of time last year, according to the company. Operating profit for its Local Media Group, which is comprised of Meredith’s 17 TV stations, grew 90% to $77 million, and EBITDA increased more than 70% to $86 million—also record quarterly highs, it said.
The broadcast division’s growth was led by a 27% increase in total advertising revenues, as well as increased retransmission revenue, Meredith said.
Meredith’s earnings report came less than a day after the group announced it inked an affiliation deal with CBS, which includes making the group’s seven CBS affiliates part of Hulu’s live TV service, which is expected to launch early this year, and potential future digital distribution deals. The agreement also keeps Meredith’s affiliates on CBS All Access, the network’s OTT service.
In the company’s earnings call Wednesday morning, Local Media Group president Paul Karpowicz said having the Hulu component as part of its agreement with CBS creates a framework under which Meredith could eventually further its distribution on other new OTT platforms as they emerge. “We look at this agreement as a package,” he said.
However, Karpowicz said Meredith will continue to independently negotiate deals that will out its stations on OTT platforms offered by traditional MPVDs, such as DirecTV Now or Dish’s Sling TV.
“With any entity that we currently have a relationship with, we will continue to negotiate those (agreements) in our normal retransmission discussions with them,” he said.
Other highlights of Wednesday’s earnings report include:
- Political money coming in at $40 million, up 37% from the last political cycle in the second quarter of fiscal 2015. Political spending was particularly robust in the Las Vegas, St. Louis, Phoenix and Kansas City markets, primarily due to very competitive down-ballot races.
- Non-political advertising revenues hit $92 million, reflecting political crowd-out, especially in the above-mentioned markets. Excluding those markets, non-political advertising revenues were down low single digits.
- Digital advertising revenues grew 18% compared to the prior year period.
- Other revenues and operating expenses increased year over year in the period, primarily due to growth in retransmission revenues from cable and satellite offset by affiliate fees.